1% of $16,000.Construction CostsConstruction Financing$432,000.@ 9% of Half of the Construction Costs.Developer Fees$473,120.4% hard costsWorking Capital Reserve$236,560.2% hard costsTotal Soft Costs:$1,582,881.Total Project Costs:$13,410,881Income Projections:Apartments:Monthly IncomeAnnual IncomeStudios$12,800.$153,600.16 @ $800.Monthly1 Bedroom$16,000.$192,000.16 @ $1,000.2 Bedroom$19,200.00$230,400.16@$1,200.00 monthly3 Bedroom$24,300.00$291,600.0018@$1,350.MonthlyNote: Rental rates are derived from comparables found on the Internet.Potential Gross Income$867,200.00ExpensesFixedReal Estate Tax$12,000.00@ 1% P.G.I.Insurance$43,360.00@ 5% P.G.I.Variable ExpensesSewer Water @ 2% PGI$17,344.00Maintenance @ 3% PGI$26,016.00Management @ 4% PGI$34,688.00Sanitation Service @ 1% $8,672.00*Heat and Electric utilities shall be paid by the tenants.Expenses total 10% of Potential Gross Income.Total Annual Expenses:$86,720.00Net Operating Income:$780,480.00Vacancy factor of$741,456.005%Coverage Ratio of 1.2$617,880.00Actual N.O.I.$617,880.00Mortgage Value$6,967,523.68N.O.I. x (100/8.868)Compare to Economic $6,504,000.00Value of ProjectN.O.I. x 100/9.5Mortgage Value is 93.3% of the Economic Value of the Project. It should fall somewhere around 75%.Therefore:Project Financing:Maximum Mortgage$5,203,200.00@ 80% economic valueEquity @ 20% total$1,300,800.00Economic valueInterest Rate7.5%Term10 YearsAmortization25 YearsAnnual Debt Service$466,791.54Mortgage x (1+i)n/(1+i)n-1Before Tax Cash Flow$270,328.46Income TaxN.O.I. $617,880.00Less DepreciationHard & Soft Cost/31.5 years $425,742.25Less Mortgage Interest$55,284.00DeductionTaxable Income$256,093.75Tax Rate of 33%After Tax Cash Flow$270,328.46Sale ProceedsSale Price equals the $6,504,000.00Economic valueGross Sale Proceeds$6,504,000.00Less Real Estate $975,600.00Commission of 15%Of Selling PriceLess Fees of 5%$325,200.00Less Advertising and$325,200.00MarketingNet Sale Proceeds$4,878,000.00Less ...
